Torts; CUTPA; Whether the Plaintiffs Held a Security Interest in Certain Equipment;
Whether the Plaintiffs Proved Their Claims of Conversion, Fraudulent Conveyance,
Tortious Interference and a Violation of CUTPA; Whether the Court Properly
Pierced the Corporate Veil. The plaintiffs, Basile and Olympia Tzovolos, entered
an agreement to sell kitchen equipment to Scott Wiseman and Seawind, LLC, for a
restaurant. Wiseman executed a promissory note in favor of the plaintiffs, who
retained a purchase money security interest in the equipment. Wiseman then entered
into a business partnership with Robert Hartmann, Sr., Robert Hartmann, Jr., and
Jason Hartmann. The Hartmanns' corporate entities renovated the restaurant, for
which Seawind gave them a promissory note, secured in part by the kitchen
equipment. Wiseman, whose capital contribution to the partnership was the equipment,
altered documents to conceal the plaintiffs' security interest. Thereafter, Wiseman
and Seawind failed to pay on the notes for both the equipment and the
renovations. Although the Hartmanns had been informed of the altered documents
and the plaintiffs' security interest, they nonetheless removed some of the
kitchen equipment from the restaurant, claiming that they had a valid lien on
the equipment and had foreclosed on the lien. The plaintiffs then filed a
complaint alleging, among other things, that the Hartmanns and their corporate
entities fraudulently transferred the equipment, tortiously interfered with
their contractual relations and violated the Connecticut Unfair Trade Practices
Act (CUTPA). They also sought to pierce the veil of the corporate defendants to
assert monetary claims directly against the Hartmanns. After a trial to the
court, the court found that the plaintiffs held a superior security interest in
the equipment and that defendants' claims to the equipment were not asserted in
good faith. It thus found that the defendants converted the plaintiffs'
property, acted with the intent to defraud and tortiously interfered with the plaintiffs'
contractual relations. The court concluded that the defendants had violated
CUTPA, rejecting their claim that they did not violate CUTPA since their
primary trade or business did not relate to the operation of a restaurant. Moreover,
it found that the instrumentality test for piercing the corporate veil had been
satisfied, and it held the Hartmanns personally liable for the conduct of their
corporate entities. Accordingly, it concluded that the plaintiffs were
entitled to recovery under several theories of liability and awarded them
damages, statutory interest and attorney's fees. In this appeal, the defendants
claim that the trial court improperly denied their request for a jury trial, found
that the plaintiffs held a security interest in the equipment and allowed certain
testimony regarding the value of the equipment. They also argue that the court
improperly held that they engaged in conversion, fraudulently conveyed the
equipment, tortiously interfered with contractual relations and violated
CUTPA. In addition, they claim that the court improperly pierced the corporate
veil and found that their claims to the equipment were not asserted in good
faith. In their cross appeal, the plaintiffs claim that the court improperly
precluded them from calling the defendants' expert as a witness.